Here's how Clinton and Trump plan to fix Social Security and Medicare

October 06, 2016

Social Security alone consumes nearly a quarter of the federal budget.

At this week's vice presidential debate, Democrat Tim Kaine and Republican Mike Pence spoke about how the administrations they hope to join would deal with the challenges facing safety net programs like it.

SOCIAL SECURITY

The Challenge

Social Security is a pay-as-you-go program, in which benefits for retirees and others are largely funded through the payroll taxes collected from current workers. As baby boomers retire, there will be more people drawing benefits out of the system and relatively fewer workers paying in. The Social Security trust fund helps to cushion that gap. But forecasters expect the trust fund will be exhausted in about 20 years. Once that happens, there will still be enough money coming into the system from payroll taxes to cover about 75 percent of retirees' benefits. But in order to keep paying 100 percent, some changes will be needed. The sooner policymakers act, the less drastic those changes will need to be.